Last December, he announced that he and "Hillbilly Elegy" author JD Vance were overseeing a $150 million Rise of the Rest Seed Fund, with capital from high-profile investors like Jeff Bezos, Ray Dalio, Meg Whitman, the Kochs, and the Waltons.

The fund serves as a way to tap the potential of rising startup scenes across the US, build an influential network, and jump-start American cities not on the coasts.

As AOL cofounder Steve Case read author JD Vance's memoir "Hillbilly Elegy," which is about the struggles of escaping poverty in Ohio via Kentucky transplants, he saw a slice of American life he'd been trying to improve for the last several years.

Case founded his Washington, DC-based venture capital firm Revolution in 2005 with what he called a "Rise of the Rest" ethos: the idea that there are more places to invest in than California, New York, and Massachusetts.

These three locations — essentially Silicon Valley, Manhattan, and Cambridge — have been the country's startup centers for decades, and they have taken an increasing share of investments in the last decade, according to CB Insights. The firm reported that the states accounted for roughly 75% of all US venture capital funding from 2014-2016.

Case saw this trend in 2014 and decided to double down on one of his investing principles, resulting in the first Rise of the Rest bus tour, a four-day investing trip through the Rust Belt cities of Pittsburgh, Detroit, and Cincinnati, and then ending in Nashville, which had emerged as one of the nation's fastest-growing cities.

Each day, he'd meet with local entrepreneurs and city leaders and host a startup pitch competition in which the winner received $100,000 of his personal wealth toward a seed round.

Case has now gone on seven bus tours across the US. Revolution Significant change wasn't going to come from one day in each city, but the idea was to start ongoing relationships in these communities and put a media spotlight on their business scenes.

Case and members of his Revolution team have gone on six more bus tours, establishing a network across 33 American cities. So far, Case has invested more than $3 million of his personal money during the tours, and to date, Revolution has invested more than $1 billion across its funds in companies outside of the Bay Area.

So when Case saw that "Hillbilly Elegy" author JD Vance was a Silicon Valley venture capitalist who wanted to help other Americans escape poverty through societal change, he saw someone who'd be a great fit for what he was trying to accomplish. He hired Vance away from Peter Thiel's Mithril firm and brought him on one of his bus tours.

In December of last year, Case and Vance announced a new chapter for their initiative with the Rise of the Rest Seed Fund, $150 million raised from themselves and 34 high-profile investors, including Amazon CEO Jeff Bezos, fashion label CEO Tory Burch, Bridgewater founder Ray Dalio, Hewlett Packard CEO Meg Whitman, Kleiner Perkins Caufield & Byers chairman John Doerr, and the powerful Koch and Walton families.

For all involved, this is not an act of charity. This is a real chance to profit from the next billion-dollar companies that no one else is looking at. But it's also a chance to stimulate the economies of American communities that need it the most. It's about creating large-scale value over the long term.

"So $150 million in the great scheme of things is not a huge fund — we get that," Case told Business Insider. "But if we, in fact, are on average doing 10% of rounds, we're really helping catalyze, mobilize, more like $1.5 billion of capital. And then if we have this group of investors who are well positioned to write $50 million checks down the road, hopefully it ends up being many billions of capital that gets unleashed here."

Creating a network of the country's highest-profile investors

Revolution plans on spreading that $150 million over three to four years in typical increments ranging from $100,000 to $1 million, across about 100 investments.

There will be a seventh bus tour in May, and Case said Revolution will soon announce the first batch of investments from the fund, which will be outside of the tour.

As mentioned, Case and Vance have their own money invested in the fund, and Vance is the fund's managing partner. They're joined on the Revolution side by two partners, David Hall and Anna Mason. The other 34 investors are limited partners, meaning that they have no control over how investments are made, but benefit from its potential success.

And there is the valuable networking aspect of the Rise of the Rest Seed Fund.

Regardless of how much Bezos, for example, invested, it's a relatively minuscule part of his fortune. But it offers an introduction to Revolution's specific brand of impact investing, builds a relationship with Case and Vance (an influential political figure in the US and talked-about potential senatorial candidate), and provides an entry into parts of the country with increasingly useful business opportunities.

Case sees the appeal of the fund falling into three categories:

With the vast majority of venture capital in the Valley, with NYC and Boston/Cambridge behind it, there are potentially many undervalued companies in the rest of the country, which in turns means big exits for the successful ones.

It would be an entry point into emerging communities that could lead to long-term relationships. Investors already have networks in the Bay Area and New York, but could use Rise of the Rest to start them in places like Pittsburgh and Detroit.

Making an investment that helps rising American communities has a moral component without being an act of charity.

John Doerr, one of the LPs, told Business Insider via email that startups not in the coastal hubs have their particular advantages.

"These entrepreneurs are tackling hard problems in diverse industries, like healthcare, agriculture, logistics, and manufacturing," he wrote. "There are cities between the two coasts that have unique perspectives and advantages not found in Silicon Valley or New York or Boston."

The Rise of the Rest team is looking for these kinds of entrepreneurs, with companies that have the potential to scale on a massive level.

Pitch contest winners include green energy company PK Clean from Salt Lake City, senior care software company Lifeloop from Omaha, medical device company Sisu Global Health from Baltimore, and electronic music company Artiphon from Nashville.

Case said that his work with Revolution, including his bus tours, acted as a proof of concept for both recruiting Vance and convincing investors to join the Rise of the Rest Seed Fund. Revolution is not yet sharing details of returns, but Case said, "given that they're early stage investments, obviously it takes some time to develop, but the performance of the initial portfolio was compelling. It was top quartile performance."

Investing in startups to benefit entire regions

The underlying premise of Rise of the Rest is that fueling the startup scene in a struggling or recently struggling community has benefits well beyond that startup.

Case said that he saw the beneficial effects a single growing company could have on an entire region when he oversaw AOL's growth in northern Virginia in the 1990s.

James C. Dinegar, the former CEO of the Greater Washington Board of Trade, told the Washington Post in 2015 that "AOL spawned a new generation of community involvement and investment across the region" that continued even when the company moved its headquarters to Manhattan.

Case said he found much more data to back this up during his tenure as the chair of the Startup America Partnership in the Obama administration. "And the data was pretty compelling, pretty overwhelming, in terms of the role startups had in terms of job creation," he said.

In a 2015 report on American jobs, the Kauffman Foundation found, "New businesses account for nearly all net new job creation and almost 20 percent of gross job creation," and, "Companies less than one year old have created an average of 1.5 million jobs per year over the past three decades."

The report also noted that startups are efficient drivers of economic progress, where "innovative and successful firms grow rapidly and become a wellspring of job and economic growth, or quickly fail and exit the market, allowing capital to be put to more productive uses."

The Rise of the Rest bus tours visit American communities with emerging startup communities, some that were hit especially hard by the recession and globalization. Revolution

Case noted that when these new businesses flourish, ecosystems often grow around them, attracting more talent to the community, which then leads to new homes built.

The benefits for a highly-educated professional class are obvious, but we asked Vance how these investment projects benefit the working class, the primary focus of his book.

He said that if you, for example, invested in tech startups in Columbus, Ohio, and some of them did quite well, they would bring attention and capital to the broader central Ohio region.

And "if you get these regional economies supercharged, it's not just good for the people who are working in the tech sector — which would typically be, you know, relatively high skilled people — it will also be good for people who live in the region that aren't necessarily working for a tech company but are benefitting from the economic dynamism that exists in tech sectors."

Opportunities outside of Silicon Valley

For all of this to work, Case and Vance and their team can't just swoop into a city, run a pitch competition, and expect anything to happen.

"The way I put it is, if you don't want to be an outsider to an ecosystem, don't be an outsider," Vance said. "I think if you're just going in, writing a check, and not doing anything else, then you're not going to get to know the people that you need to get to know to make that ecosystem successful."

Crystal McDonald, the founder and CEO of recruiting software company Acrew, was the winner of Rise of the Rest's New Orleans pitch competition in 2015. "We've benefitted from and received direct mentorship from Steve Case, [Case Foundation CEO and Steve's wife] Jean Case, and multiple members of the Revolution team," she said.

"The Revolution team is one of our most engaged investors," McDonald said.

The bus tours are only for introductions and media attention — the relationships Case and his team cultivate are necessary for the success of the project. Revolution Case and Vance make trips to each of these communities outside of the bus tours, as well. Vance has only been on one bus trip so far, but when we spoke to him, he had just returned to DC from a week-long trip that brought him to Salt Lake City and Denver.

"I didn't make any investments out of that trip in Salt Lake City, but what I did was I met with a lot of people and I got to know a lot of the entrepreneurs and the investors who are working in those places," Vance said. "Same thing in Denver. I just spent a day getting to know people and trying to understand what they need, what they're seeing, what they're experiencing.

"And to me, the only way to really be a part of these ecosystems is to actually get on the ground and do the work and get to know people," he continued.

Vance said the bus tours are useful for drawing attention to these communities and building momentum, but that the relationships develop afterward.

The tours are also opportunities to get Revolution's partners involved. "I was pleasantly surprised when they brought in a Google pitch coach to help us relax on stage and pitch our best," said Ann Arbor contest winner Shelly Sahi, founder and CEO of SAHI Cosmetics.

There's another bus tour coming up in May, destinations not yet public, and a summit in February where more than 100 regional investors will congregate in DC and discuss ways to bring more capital to their parts of the country.

Case told us that since announcing the list of LPs in the Rise of the Rest Seed Fund in December, there has been a "quite significant level of interest among both regional investors wanting to partner with us and co-invest, as well as entrepreneurs" who want to pitch themselves. The first investments from the fund will be announced soon.